AI Drafter 
TaxTMI 
TaxTMI 
2020 (5) TMI 550
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....ies to several business houses by getting the amount transferred from their accounts by RTGS and / or cheque and later on (immediately thereafter, preferably on the same day) withdrawing the entire amount and as stated by them in their statements, returning them to the parties who had got sums transferred into accounts of these persons (i.e. the entry providers Shri Pankaj Sharma, Ajay Sharman and Others). The AO extracted the names of different persons/ firms who had given the accommodation entries and the name of the beneficiaries and thereafter issued summons to some of the parties on test check basis who had been provided accommodation entries. On being confronted by the AO it was claimed by the assessee that he was getting commission of 0.01% which amounts to Rs. 10,000/- per Rs. 1 crore of accommodation entry. On the basis of the search operation and post search enquiries and survey u/s. 133 A in the premises of Rishav Trading Company and details of bank account of Sh. Manoj Kumar Jain in the name of his proprietorship firm M/s. Rishav Trading Company, the AO concluded that the assessee was involved in the business of entry providing. He, therefore, issued notice u/s. 153 C f....
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....this contention. The impugned assessment order deserves to be cancelled/annulled. 2. That the impugned assessment order also deserves to be cancelled/annulled because the AO had failed to observe principles of natural justice by not giving proper and adequate opportunity of being heard before completing the impugned assessment order. 3. That the authorities below had failed to appreciate that the Appellant was an / actual trader duly registered with the Trade Tax Authorities and had verified the transactions from record of the Appellant and therefore, the impugned assessment order as passed on the same lines as has been done in other Assessees Shri Pankaj Sharma, Shri Ajay Sharma and others. From this angle also, the impugned assessment order being illegal, deserves to be cancelled/annulled. 4. That without prejudice to the above grounds, the authorities below had no justification to make an addition of JRSZ3J56/L265/- representing bank credits on protective basis in the absence of such 'additions having been made in the hands of others on substantive basis and without giving proper and adequate opportunity of being heard coupled with the fact that th....
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....r hearing both the sides and considering the fact that the additional grounds raised by the assessee are purely legal in nature and no fresh facts are required to be investigated, the same are admitted for adjudication. 8. The Ld. Counsel for the assessee at the outset submitted that the assessment for the impugned assessment year have been completed u/s.143(3) whereas the same should have been completed u/s.153C since the satisfaction note was prepared by the AO on 18.09.2012 and the impugned assessment year i.e. A.Y. 2011-12 falls within the period of six years. Since the AO in the instant case has not passed the order u/s. 153 C as no notice u/s. 153C was issued, therefore, the order passed by the AO u/s. 143 (3) is not legally valid. For the above proposition he relied on the following decisions placed in the paper book :- 1. Recent Apex court decision in Singhad Technical Society (order dated 29.08.2017 ) 397 ITR 344 2. Hon'ble Delhi high Court decision in case of Fast Booking (I) Pvt. Ltd., order dated 02.09.2015 (ITA No.334/2015) (378 ITR 693) 3. Hon'ble Delhih high Court decision in the case of Silver Line, order dated 04.11.2015 (ITA Nol.578/2....
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.... 31.03.2013 Assessment is completed u/s. 153 C of the IT Act, 1961. Issue D/N, Challan etc. Initiate penalty proceedings u/s. 271 (1) (c) for concealment, 271 AAA, 271 B & 273 of the Income Tax Act, 1961. 11. Since the AO has issued the notice u/s. 153 C and the assessment has been completed u/s. 153C of the IT Act, therefore, we do not find and substance in the additional grounds raised by the assessee. Accordingly the above grounds are dismissed. 12. So far as the other grounds are concerned the Ld. Counsel for the assessee did not press grounds of appeal No.1,2,3,7,8 and 9 for which the Ld. DR has no objection. Accordingly the above grounds are dismissed as not pressed. 13. So far as the ground No.4 and 5 are concerned these relate to the order of the CIT(A) in confirming the addition of Rs. 23,56,61,265/- made by the AO on protective basis and the addition of Rs. 70,69,838/- being commission @ 3% on the bank credit of Rs. 23,56,61,265/-. 14. So far as the commission @ 3% is concerned the Ld. Counsel for the assessee relying on a series of decisions placed in the paper book submitted that in the case of entry operators such commission has been e....
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....ment, however, there cannot be any protective assessment without there being a substantive assessment. He also relied on the decision of the Mumbai Bench of the Tribunal in the case of MP Ramchandara Vs. DCIT reported in 32 SOT 592 and Suresh K. Jajoo Vs. ACIT reported in 39 SOT 514 and various other decisions and submitted that since no substantive addition has been made in the hand of any other person, therefore, there cannot be any protective addition in the hands of the assessee. 16. The Ld. DR on the other hand heavily relied on the order of the Ld. CIT(A) so far as the addition of Rs. 23,56,61,265/- is concerned she submitted that the assessee was unable to give the full details regarding the source of such deposits and name of the persons who had given the money and, therefore, the AO was fully justified in making the addition on protective basis which has been rightly upheld by the CIT(A). So far as the adoption of rate of 3% commission is concerned, she submitted that the same is reasonable and therefore, the same should be upheld. She accordingly submitted that the order of the CIT(A) on these two additions should be upheld. 17. We have considered the rival argument....
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....ade any substantive assessment or addition in any other hand, therefore, the protective addition made in the hands of the assessee being not in accordance with law has to be deleted. We accordingly set aside the order of the CIT(A) and direct the AO to delete the addition of Rs. 23,56,61,265/- made by him on protective basis without making any addition on substantive basis. 19. In ground No. 6 the assessee has challenged the order of the CIT(A) in sustaining the addition of Rs. 26,54,591/- for alleged unaccounted purchases. 20. Facts of the case, in brief, are that during the course of survey at the office premises of the assessee, a document marked annexure A-1 containing 80 pages was impounded which contained details of sales of Rs. 6,97,54,767/- during the months of July to October 2010 pertaining to 38 parties. The AO treated these transactions as unaccounted sales and applied the GP rate of 1.42% which is the rate disclosed for the A.Y. 2010-11. The AO thereafter extrapolated the sales and applying GP @ 1.42 % on the turnover of Rs. 64,70,28,619/-estimated the GP at Rs. 90,44,509/-. He also computed the unaccounted capital involved in the unexplained turnover @ 2,11,99,4....